Photo: Nicu Buculei on Flickr
With the ECB expanding bond-buying to Italy and Spain and poised to implement the Greek bailout, investors will be scrutinizing upcoming bond auctions in the periphery for signs of weakness.There appear to be some mixed — but not wholly unexpected — signals.
Here’s what’s going on:
– This morning, Greece raised €812.5 million ($1,159 million) in an auction of 6-month treasury bills, paying a yield of 4.85%. That’s down from 4.90% in July, evidence of some renewed confidence after the ECB reached a deal last month. The auction was 3.06x oversubscribed.
– Italy will stage an auction tomorrow to raise around €6.5 billion ($9.3 billion). It has already cancelled an August 12 auction, due to “the large cash availability and the limited borrowing requirement.”
– Both Spain and France announced last month that they have cancelled medium- and long-term bond auctions for August, and are set to resume them in September.